Passenger Vehicle Loss Disclosure Act Introduced in SenatePosted 9/08/2006
By Robert L. Redding, Jr.
The debate over uniform salvage definitions and title reform was quite extensive a decade ago in the U.S. Congress. After the completion of the Motor Vehicle Uniform Salvage Titling Report by a National Highway Traffic Safety Administration (NHTSA) Federal Advisory Committee, legislation was introduced in both the U.S. House of Representatives and Senate.
Interest groups lined up on various sides. Consumer organizations, motor vehicle administrators, the National Association of Attorneys General and others supported a strict salvage percentage definition that went far below that advocated by independent collision shops. Repairers were concerned about the potential number of vehicles removed from the repair marketplace. Some insurers supported the NHTSA report while others supported the collision repairer position.
Although titling legislation was readily approved in the House, the salvage definition was clearly an obstruction in the U.S. Senate. With what appeared to be a Senate Commerce Committee salvage definition already too low to be acceptable to collision repairers, U.S. Sen. Dianne Feinstein, D-Calif., introduced legislation that lowered the salvage definition even further and also included a post-repair inspection program that would be administered through self- or shop inspection. At the time, both of these changes were opposed by the collision repair industry.
To date, national uniform titling policy discussions have slipped away, left to the states to develop some form of uniformity over a long period of time. There has not been another national attempt at titling reform since the '90s.
Hurricane Katrina has precipitated the debate in Congress once again but within a much narrower agenda. Instead of uniform titling, the response to the onslaught of flood vehicles in the marketplace has been national vehicle disclosure to the motoring public.
U.S. Sen. Trent Lott, R-Miss., recently introduced the Passenger Vehicle Loss Disclosure Act that will require all insurers and self-insurers of passenger motor vehicles to disclose to the public the following information for every passenger motor vehicle that has been declared a total loss by an insurer or determined to be a total loss by such a self-insurer:
The public disclosures must be made in a commercially reasonable, electronically accessible manner. Lott said: "In fact, insurance companies will be required to make this information available for purchase by commercial companies that package and sell information to consumers, such as Web sites offering vehicle history reports."
Lott recapped the decade-long debate over uniform titling by offering, "In past years I've tried to get stricter 'title branding' statutes passed nationally to require that all major auto damage be reported on a car's title, which is linked to the VIN. It's gotten lukewarm reception from the insurance industry and others who frankly think it's too much work. I expect insurance companies will oppose this latest measure, too."
The sheer volume of potential flood vehicles in the marketplace has been demonstrated to the Congress since Katrina hit the Gulf Coast. In testimony before the House and Senate Commerce Committees, witnesses provided consistent testimony that there was the potential for hundreds of thousands of flood vehicles to move into the U.S. marketplace. Rachel Weintraub, Consumer Federation of America, testified before the House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection, "The economic impact is staggering: title-related car fraud costs consumers up to an estimated $11.3 billion each year."
Lott's legislation meets the test for resolving this potentially devastating vehicle fraud problem illustrated by Robert M. Bryant, president of the National Insurance Crime Bureau, when he testified before the U.S. Senate Committee on Commerce, Science and Transportation Subcommittee on Consumer Affairs, Product Safety and Insurance. Bryant said, "The entire problem with salvage and flood vehicle fraud can be condensed into one word - 'disclosure.' Disclosing the condition of a vehicle as salvage or flood-damaged is all that is necessary to defeat this problem. However, there is a vast amount of money to be made by selling these vehicles to unsuspecting consumers."
The Automotive Service Association supports Lott's legislation, S. 3707. Consumers, law enforcement and independent repairers benefit from more public disclosure of these total loss vehicles. The technology and information are available. Requiring the U.S. Secretary of Transportation to ensure that these disclosures are made in a timely manner is most beneficial; specifically when the insurer terminates coverage on the vehicle due to its total loss or when the self-insurer determines the vehicle to be a total loss.
ASA asks collision repairers to go to the ASA legislative Web site - www.TakingTheHill.com- and write to their U.S. senators asking that they support S. 3707, the Passenger Vehicle Loss Disclosure Act.
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